Correlation Between Sangamo Therapeutics and Beam Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sangamo Therapeutics and Beam Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sangamo Therapeutics and Beam Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangamo Therapeutics and Beam Therapeutics, you can compare the effects of market volatilities on Sangamo Therapeutics and Beam Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sangamo Therapeutics with a short position of Beam Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangamo Therapeutics and Beam Therapeutics.
Diversification Opportunities for Sangamo Therapeutics and Beam Therapeutics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sangamo and Beam is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sangamo Therapeutics and Beam Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beam Therapeutics and Sangamo Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sangamo Therapeutics are associated (or correlated) with Beam Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beam Therapeutics has no effect on the direction of Sangamo Therapeutics i.e., Sangamo Therapeutics and Beam Therapeutics go up and down completely randomly.
Pair Corralation between Sangamo Therapeutics and Beam Therapeutics
Given the investment horizon of 90 days Sangamo Therapeutics is expected to generate 6.11 times less return on investment than Beam Therapeutics. In addition to that, Sangamo Therapeutics is 1.67 times more volatile than Beam Therapeutics. It trades about 0.02 of its total potential returns per unit of risk. Beam Therapeutics is currently generating about 0.18 per unit of volatility. If you would invest 2,235 in Beam Therapeutics on August 28, 2024 and sell it today you would earn a total of 430.00 from holding Beam Therapeutics or generate 19.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangamo Therapeutics vs. Beam Therapeutics
Performance |
| Timeline |
| Sangamo Therapeutics |
| Beam Therapeutics |
Sangamo Therapeutics and Beam Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangamo Therapeutics and Beam Therapeutics
The main advantage of trading using opposite Sangamo Therapeutics and Beam Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangamo Therapeutics position performs unexpectedly, Beam Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Beam Therapeutics will offset losses from the drop in Beam Therapeutics' long position.| Sangamo Therapeutics vs. Editas Medicine | Sangamo Therapeutics vs. Intellia Therapeutics | Sangamo Therapeutics vs. Bluebird bio | Sangamo Therapeutics vs. Alnylam Pharmaceuticals |
| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve Therapeutics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |